Case Law Details
Swati Jignesh Jain Vs ITO (ITAT Mumbai)
Introduction: Dive into the intricacies of the case involving Swati Jignesh Jain and the Income Tax Officer (ITO) as the Income Tax Appellate Tribunal (ITAT) Mumbai deliberates on the imposition of penalty under Section 271(1)(b) of the Income Tax Act, 1961. The core issue revolves around the AO’s deemed condonation of the assessee’s absence during the assessment proceedings, ultimately influencing the tribunal’s decision. This article provides a comprehensive analysis of the proceedings and the tribunal’s verdict.
Detailed Analysis: The article delves into the background of the case, highlighting that Swati Jignesh Jain, an individual, initially faced a reopened assessment for the assessment year 2014-15. The AO completed the reassessment under Section 143(3) of the Act on December 29, 2017. During the re-assessment proceedings, the assessee faced challenges in securing her presence and clarity arose due to her marital status. However, the AO, upon the subsequent appearance and submission of necessary details by the assessee, deemed the earlier absence as condoned.
The detailed analysis includes references to relevant legal precedents such as Ganesh B Pokhriyal vs ACIT, Globus Infocom Ltd., vs. DCIT, Akhil Bharatiya Prathmik Shamshak Sangh Bhawan Trust vs. ADIT, and Pillala Vishnuvandana vs. ACIT. These cases establish the precedent that when assessments are completed under Section 143(3), the AO is deemed to have condoned the assessee’s earlier absence or that of the authorized representative.
Conclusion: Based on the legal precedents and the understanding that the AO’s completion of assessment under Section 143(3) implies condonation of the assessee’s earlier absence, the ITAT Mumbai decided that this is not a suitable case for imposing a penalty under Section 271(1)(b) of the Act. The tribunal directed the AO to delete the penalty. This conclusion underscores the importance of recognizing the AO’s actions in the assessment process and their impact on subsequent penalty considerations.
The ITAT Mumbai’s decision in favor of Swati Jignesh Jain sets a precedent for cases where the AO deems the earlier absence during assessment proceedings as condoned. It emphasizes fairness in penalty considerations, ensuring a holistic understanding of the circumstances before imposing penalties.
It has been held that of the Act could be levied when an assessment has been completed u/s.143(3) of the Act, wherein the ld. AO is deemed to have condoned the absence of the assessee or his authorised representative on earlier occasions when subsequently, the details were furnished by him and the assessments were ultimately completed u/s.143(3) of the Act. Hence, we deem it fit that this is not a fit case for levy of penalty u/s.271(1)(b) of the Act.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
This appeal in ITA No.1971/Mum/2021 for A.Y.2014-15 arises out of the order by the ld. Commissioner of Income Tax (Appeals) National Faceless Appeal Centre (NFAC) Delhi in Order No. ITBA/NFAC/S/250/2021-22/1035850578(1) dated 24/09/2021 (ld. CIT(A) in short) in the matter of imposition of penalty u/s.271(1)(b) of the Income Tax Act, 1961 (hereinafter referred to as Act).
2. The only issue to be decided in this appeal is as to whether the ld. CIT(A) was justified in confirming the levy of penalty u/s.271(1)(b) of the Act in the facts and circumstances of the instant case.
3. We have heard rival submissions and perused the materials available on record. We find that assessee is an individual and had filed its return of income for A.Y.2014-15 on 30/07/2014 declaring total income of Rs.2,84,294/-. The case was reopened u/s.147 of the Act and consequently reassessment was completed u/s.143(3) of the Act on 29/12/2017. In the course of re-assessment proceedings though initially the assessee did not secure its presence in person or through her authorised representative before the ld. AO, finally appeared before the ld. AO in person and even furnished a statement u/s.131 of the Act before the ld. AO by filing the requisite details. The assessee also explained before the ld. AO that she got married during the course of reassessment proceedings and that she was under the confusion as to who was handling her income tax matters i.e. whether it is being handled by her father or by her in-laws. In view of this confusion, there was some absence in the initial period before the ld. AO but later on once the confusion was resolved, she started appearing in person before the ld. AO and furnished all the requisite details that were called for. Ultimately, the assessment was completed u/s.143(3) of the Act by the ld. AO, which goes to prove that the earlier absence of the assessee has been duly condoned by him. Reliance in this regard is placed on the following decisions in support of contentions of the assessee which are directly on the point:-
a. Ganesh B Pokhriyal vs ACIT in ITA No.5291/Mum/2018 dated 29/11/2019
b. Globus Infocom Ltd., vs. DCIT in ITA No.738/Del/2014 dated 29/06/2016
c. Akhil Bharatiya Prathmik Shamshak Sangh Bhawan Trust vs. ADIT reported in 115 TTJ 419(Del)
d. Pillala Vishnuvandana vs. ACIT reported in 88 com 803 (Visakhapatnam Trib.)
3.1. In the aforesaid case laws, it has been held that no penalty u/s.271(1)(b) of the Act could be levied when an assessment has been completed u/s.143(3) of the Act, wherein the ld. AO is deemed to have condoned the absence of the assessee or his authorised representative on earlier occasions when subsequently, the details were furnished by him and the assessments were ultimately completed u/s.143(3) of the Act. Hence, we deem it fit that this is not a fit case for levy of penalty u/s.271(1)(b) of the Act. We direct the ld. AO to delete the said penalty. Accordingly, the grounds raised by the assessee are allowed.
4. In the result, appeal of the assessee is allowed.
